Adds approximately $450 million to Gannett’s
revenues
$35 million annual synergy
opportunity
Immediately EPS accretive
Gannett Co., Inc. (NYSE: GCI) (“Gannett”) and Journal Media
Group, Inc. (NYSE: JMG) (“JMG”) announced today that they have
entered into a definitive merger agreement under which Gannett will
acquire all of the outstanding common stock of Journal Media Group
for approximately $280 million, net of acquired cash.
This Smart News Release features multimedia.
View the full release here:
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Under the terms of the transaction, which was unanimously
approved by the boards of directors of both companies and is
subject to Journal Media Group shareholder approval, Journal Media
Group shareholders will receive cash of $12.00 per share in cash.
Based on the closing price of Journal Media Group on October 7,
2015, this represents a premium of 44.6%. Gannett will finance the
transaction through a combination of cash on hand and borrowings
under Gannett’s $500 million revolving credit facility.
Robert J. Dickey, president and chief executive officer of
Gannett said, “The publications of both Gannett and Journal Media
Group have a rich history, a commitment to journalism, and a
dedication to informing and being active members in the communities
we serve. Our merger will combine the best of each of our
organizations to create a journalism-led, investor-focused company
which will provide substantial value to the shareholders of both
companies. This transaction is an excellent first step in the
industry consolidation strategy we have communicated to our
shareholders and is a good example of the value-creating
opportunities we believe are available.”
“We would also like to welcome the outstanding leadership,
journalists, sales staff and other employees of Journal Media Group
to the Gannett family. Our combined company will be an industry
leader, dedicated to the local communities we serve, committed to
generating value for shareholders and empowering communities to
connect, act and thrive,” Dickey concluded.
“This transaction marks a critical next step in the
transformation of our industry as we build local media brands that
matter at a time when operational scale is a competitive
advantage,” said Tim Stautberg, president and chief executive
officer of Journal Media Group. “Both Journal Media Group and
Gannett are guided by a vision of strengthening lives and
communities, and we’ll be better stewards in our local markets by
sharing ideas, content and best practices among our new and larger
family.”
The combination of Journal Media Group and Gannett will create a
portfolio of 106 local markets in the U.S. and will result in a
combined digital audience of more than 100 million unique domestic
visitors a month. The acquisition will also enable the combined
company to realize significant operating efficiencies. The
properties in Journal Media Group’s markets will benefit from the
consolidated functions Gannett has established over the last
several years. Additionally, the regional proximity of some of the
Journal Media Group markets will also enable Gannett to further
utilize its printing and distribution assets.
Financial Highlights
- Adds approximately $450 million to
Gannett’s annual revenues.
- Adds approximately $60 million of
adjusted EBITDA, including over $10 million of immediately
available synergies.
- Opportunity for approximately $25
million of additional operating synergies to be fully realized over
the next two years via the consolidation of corporate and
administrative operations, integration with the Gannett shared
service centers and consolidation of certain printing and
distribution assets in multiple adjacent markets.
- Immediately EPS accretive:
approximately $0.10 - $0.15 per share in the first full year and
$0.20 - $0.25 in the second year.
Strategic Highlights
- Adds 15 dailies and 18 weeklies in 14
local markets, in nine states; includes key markets such as
Milwaukee, WI and Memphis and Knoxville, TN.
- Adds daily and Sunday circulation of
approximately 675,000 and 950,000, respectively.
- Adds more than 10 million unique
digital domestic visitors a month.
- Leverages Gannett’s existing
industry-leading content and national USA TODAY brand, enables the
integration of Journal Media Group properties onto Gannett’s
Digital Platform, and delivers additional scale for
National-to-local strategy.
Tax Considerations
The transaction is not expected to disturb the tax-free
treatment of the prior transactions between The E.W. Scripps
Company and Journal Communications, Inc. whereby Journal Media
Group has previously agreed to indemnify Scripps for the adverse
tax consequences emanating from its actions or failures to act
following the closing of that transaction. Journal Media Group,
prior to entering into the merger agreement with Gannett, has
delivered an unqualified tax opinion from its law firm to Scripps,
which opinion Scripps has deemed to be acceptable in form and
substance.
The receipt of cash for shares of Journal Media Group will be a
taxable transaction for U.S. federal income tax purposes. In
general, a holder of Journal Media Group common stock will
recognize a gain or loss in an amount equal to the difference
between the amount of cash received in the merger and the holder's
adjusted tax basis in the shares.
Required Approvals
This transaction is subject to customary closing conditions,
including, approval of the merger by holders of a majority of the
outstanding shares of Journal Media Group common stock and
antitrust regulatory clearance. The transaction is expected to
close in the first quarter of 2016.
Advisors
Stephens Inc. is acting as financial advisor to Gannett, and
Skadden, Arps, Slate, Meagher & Flom LLP is acting as legal
advisor to Gannett. Methuselah Advisors is acting as financial
advisor to Journal Media Group, and Foley & Lardner LLP is
acting as legal advisor to Journal Media Group.
About Gannett
Gannett Co., Inc. (NYSE: GCI) is a next-generation media
company committed to strengthening communities across our network.
Through trusted, compelling content and unmatched local-to-national
reach, Gannett touches the lives of nearly 100 million people
monthly. With more than 110 markets internationally, it is known
for Pulitzer Prize-winning newsrooms, powerhouse brands such as USA
TODAY and specialized media properties. To connect with us, visit
www.gannett.com.
About Journal Media Group
Journal Media Group (NYSE: JMG), headquartered in Milwaukee, is
a media company with print and digital publishing operations
serving 14 U.S. markets in nine states, including
the Milwaukee Journal Sentinel, the Naples Daily
News, The Commercial Appeal in Memphis, and Ventura
County Star in California. Formed in 2015 through a merger of
the newspaper operations of The E.W. Scripps Company and Journal
Communications, Inc., the company serves local communities with
daily newspapers, affiliated community publications, and a growing
portfolio of digital products that inform, engage and empower
readers and advertisers. Learn more
at www.journalmediagroup.com.
Additional Information and Where to Find It
This communication does not constitute a solicitation of any
vote or approval. Journal Media Group intends to file with the SEC
and mail to its shareholders a proxy statement in connection with
the proposed merger. Journal Media Group URGES INVESTORS AND
SHAREHOLDERS TO READ THE PROXY STATEMENT AND ANY OTHER RELEVANT
DOCUMENTS WHEN THEY BECOME AVAILABLE, BECAUSE THEY WILL CONTAIN
IMPORTANT INFORMATION about Gannett, Journal Media Group and the
proposed merger. Investors and security holders will be able to
obtain these materials (when they are available) and other
documents filed with the SEC free of charge at the SEC’s website,
www.sec.gov. In addition, a copy of Journal Media Group’s proxy
statement (when it becomes available) may be obtained free of
charge from Journal Media Group’s website,
www.journalmediagroup.com, or by writing or calling Journal Media
Group at 333 West State Street, Milwaukee, Wisconsin 53203, (414)
224-2000, Attention: Corporate Secretary. Investors and security
holders may also read and copy any reports, statements and other
information filed by Gannett or Journal Media Group with the SEC,
at the SEC public reference room at 100 F Street, N.E., Washington,
D.C. 20549. Please call the SEC at 1-800-SEC-0330 or visit the
SEC’s website for further information on its public reference
room.
Participants in the Merger Solicitation
Journal Media Group and its directors, executive officers and
certain other members of management and employees may be deemed to
be participants in the solicitation of proxies in respect of the
proposed merger. Information regarding Journal Media Group’s
directors and executive officers is available in Journal Media
Group’s registration statement on Form S-4 (Registration No.
333-201540). Other information regarding the participants in the
proxy solicitation and a description of their direct and indirect
interests, by security holdings or otherwise, will be contained in
the proxy statement and other relevant materials to be filed with
the SEC when they become available.
FORWARD LOOKING STATEMENTS
Certain statements in this press release may be forward looking
in nature or constitute “forward-looking statements” as defined in
the Private Securities Litigation Reform Act of 1995, including
statements regarding the proposed acquisition of Journal Media
Group by Gannett, the expected timetable for completing the
acquisition and the benefits of the acquisition. Forward-looking
statements include all statements that are not historical facts and
can typically be identified by words such as “believe,” “expect,”
“estimate,” “predict,” “target,” “potential,” “likely,” “continue,”
“ongoing,” “could,” “should,” “intend,” “may,” “might,” “plan,”
“seek,” “anticipate,” “project” and similar expressions, as well as
variations or negatives of these words. Any such statements speak
only as of the date the statements were made and are not guarantees
of future performance. The matters discussed in these
forward-looking statements are subject to a number of risks,
trends, uncertainties and other factors that could cause actual
results and developments to differ materially from those projected,
anticipated or implied in the forward-looking statements. These
factors include, among other things, economic conditions affecting
the newspaper publishing business, the uncertainty of regulatory
approvals, the ability to obtain the requisite Journal Media Group
shareholder approval, Gannett’s and Journal Media Group’s ability
to satisfy the merger agreement conditions and consummate the
transaction on a timely basis, and Gannett’s ability to
successfully integrate Journal Media Group’s operations and
employees with Gannett’s existing business. Additional information
regarding risks, trends, uncertainties and other factors that may
cause actual results to differ materially from these
forward-looking statements is available in Gannett’s filings with
the U.S. Securities and Exchange Commission, including Gannett’s
registration statement on Form 10, and in Journal Media Group’s
filings with the U.S. Securities and Exchange Commission, including
Journal Media Group’s registration statement on Form S-4. Any
forward-looking statements should be evaluated in light of these
important risk factors. Gannett and Journal Media Group are not
responsible for updating or revising any forward-looking
statements, whether as a result of new information, future events
or otherwise, except as required by law.
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version on businesswire.com: http://www.businesswire.com/news/home/20151007006588/en/
For investor inquiries, contact:Gannett
Contact:Michael P. DickersonVice President, Investor
Relations703-854-6185mdickerson@gannett.comorJournal Media Group
Contact:Jason GrahamSenior Vice President, CFO and
Treasurer414-224-2363Jason.graham@jmg.comorFor media inquiries,
contact:Gannett Contact:Amber AllmanVice President,
Corporate Communications703-854-5358aallman@gannett.comorJournal
Media Group Contact:Laurel JahnCommunications
Manager414-224-2059Laurel.jahn@jmg.com
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